Economy

Wilbur Ross, Who is Always Wrong, Says The Fed Was Wrong

JM Ashby
Written by JM Ashby

Commerce Secretary Wilbur Ross appeared on Bloomberg TV this morning where he said the Federal Reserve's decision to raise interest rates was "premature."

That may or may not be true, but it would only be true after the fact.

Ross said "most economists have been wrong" about inflation while conveniently leaving out Trump's disruptive presence in the economy.

“Where most economists have been wrong, particularly the Federal Reserve staff economists have been wrong, is they have been believers in the idea that as unemployment goes down, inherently inflation will become a problem,” he said in an interview Wednesday on Bloomberg Television.

“They have been simply wrong in that thesis” and “that has led the Fed to be more aggressive in interest rates than the facts really warranted,” he said. “We really don’t have inflation” and “nobody thinks we’re in runaway inflation right now,” he said.

There is a huge amount of space between "inflation" and "runaway inflation." It's not as if those are the only two options.

In fact, the Federal Reserve has responded to inflation which climbed to between 2 and 3 percent several times in the past year as a result of many factors including Trump's trade war and his war on the Affordable Care Act. The rising cost of housing, health care, and education led the way to inflation as Trump's assault on virtually all progressive policy has increased the cost of living for most Americans.

If Trump had not done everything he can to increase the cost of health care, and if Trump had not sucked tens of billions of dollars out of the economy with a pointless trade war, the Federal Reserve may have already raised interest rates again.

Raising rates as the economy grows is natural. What is not natural is cutting rates during a period of economic expansion because the *president is meddling with macroeconomic factors that are far beyond his own understanding.

If the Federal Reserve cuts interest rates this year while the economy is still technically expanding, it will be a statement that the entire economic experiment of the Trump regime is a failure less than three years into his term.

  • swift_4

    They aren’t raising rates because of fear of inflation. They are desperately trying to raise rates because of the upcoming repeat of the crash of 2007. One reason the crash didn’t become a recession/depression is that they were able to keep dropping interest rates to give the economy a little kick.

    But since rates are at rock bottom still, we are screwed.

  • muselet

    Has Donald Trump appointed anyone—anyone at all, to any position at all—who actually understands the theory and practice underlying their responsibilities? Because I can’t think of any.

    –alopecia

    • gescove

      They “understand the theory and practice” only insofar as it benefits the wealthy, harms vulnerable communities, undermines democratic institutions, and consolidates Republican power. When it comes to those things, every one of them is a fucking Einstein.